On the sidelines of the Hannover Messe industrial trade fair in Germany this year, the results of a survey conducted by the global accounting consultancy firm EY, and research agency Delphi were released, which compared the investment climate in the BRICS countries. More than 90% of the surveyed CEOs and CFOs from leading German high-tech companies stated that India currently offers a better investment climate than its BRICS peers.
The study also identified several perceived challenges across high-tech manufacturing sectors and investor groups. Among other things, this included improvement in infrastructure, simplification of regulatory procedures, liberalisation of FDI, and simplification of the tax system.
Interestingly, the EY/Delphi survey noted in its analysis of several manufacturing sectors that renewable energy sector is among those that offer ‘greatest convergence for Indo-German collaboration’.
Indian Prime Minister Modi, who was in Germany on a tour around the Hannover Messe industrial trade fair, vowed to remove unnecessary regulations and procedures to simplify the process of foreign investment in India, as well as to make it easier for other countries to initiate business deals.
Modi further called for Germany’s cooperation in the manufacturing of equipment for renewable energy in India.
In fact, if one looks back over one year run of the Modi government, energy diplomacy has been a core and consistent agenda of his foreign trips.
In the joint statement issued by the two countries on the occasion, Germany resolved to “support India’s proposed objective of 175 GW of renewable energy by 2022 through technical and financial support for developing comprehensive solar rooftop and green energy corridor projects in India.”
Several Indian companies utilized the opportunity to strike deals with many of their German counterparts. Indian business conglomerate, Essel Group, signed a Memorandum of understanding (MoU) with FeCon GmbH, a subsidiary company of Wind and Sun Technology GmbH for transfer of wind and solar energy technology. According to the Essel management, FeCon GmbH will assist Essel in developing and manufacturing wind turbines in India along with power station and grid equipment for solar and wind energy to suit Indian conditions. As per Mr. Ashok Agarwal, CEO, Essel Infraprojects, the partnership will help the company deliver on its commitment to produce 12500 MW of solar energy and 4000 MW of wind energy in India in the coming year.
Welspun Renewables Energy Limited, a subsidiary of one of the leading Indian solar power developers, has signed a deal with the German technology firm iPLON for supply of automation systems for the former’s upcoming portfolio of 550 MW solar PV projects. Until now, Welspun has commissioned 328 MW of solar PV projects in various states of India, while several other solar and wind projects are currently under construction. The deal shall provide iPLON entry across India’s rapidly growing solar power industry, across various states including Tamil Nadu, Rajasthan, Punjab, Madhya Pradesh, and Gujarat.
In another collaboration, Vikram Solar announced partnership, and signed MoUs with Fraunhofer, Meyer Burger and Centrotherm Photovoltaics. These partners will assist Vikram Solar with process improvements in solar cell and module manufacturing, as well as research & development for materials, processes, and device technologies. Vikram has been aiming to rapidly expand its manufacturing capability in a bid to emerge as one of the largest integrated players in the solar industry.
In addition, Fraunhofer and Vikram Solar will collaborate to establish a solar academy in India, which will serve to impart technical knowledge, expertise, and practical training in solar energy systems. The Indian government has announced plans to train around 50,000 technicians in areas related to solar power.
India is also in talks with the German development bank KfW for funding worth €1 billion to expand the rooftop solar power infrastructure in India. Of the 100 GW solar power target set for 2022, about 40 GW is expected to come from rooftop solar. KfW has also been backing up India’s efforts to upgrade its electricity grid infrastructure. The project known as the ‘Green Energy Corridor’ plans to strengthen transmission infrastructure in eight states to absorb more clean power. €750 million have already been committed in the past two for financing the interstate and intrastate projects under the project.
Germany is also providing technical assistance for forecasting, balancing, market design and network management in connection with the grid integration of renewable power under Indo-German Technical Cooperation.
Recently, the French Development Agency (Agence Française de Développement, or AFD) extended a credit line of €1 billion over the next three years for sustainable infrastructure and urban development in India.
Photo Credit: Press Information Bureau via official site